Tesla CEO Elon Musk went to Germany to speak with workers at the company's engineering subsidiary to avert a strike.
Ensuring the introduction of the Model 3 on time this summer must be important to Tesla CEO Elon Musk — he’s flown to Germany to speak directly with employees at the company’s engineering subsidiary in hopes of heading off a strike that could make it impossible to meet the car’s deadline this summer.
While Tesla’s hourly workers in the U.S. are non-union, the 700 employees of Tesla Grohmann Automation belong to IG Metall. The workers have two primary concerns: salaries and layoffs.
According to Electrek, the workers are unhappy that they are paid 30% less than the union scale calls for. Tesla’s offered a nearly $300 a month bump in pay, although that would still leave them a bit short of their target number.
Additionally, when Tesla bought the company last fall, it ditched the company’s non-Tesla customers so it could focus on ensuring the Model 3 is ready to go mass-market this summer. Once that’s accomplished they fear layoffs will come because of a perceived lack of work.
(Tesla idling California plant briefly to prep for Model 3 production. Click Here for the story.)
In his discussions with employees, Musk reportedly has assured them that there are no layoffs planned for at least five years. He’s offered workers a 10,000-euro grant of Tesla stock, worth about $10,700 that vests quarterly over four years. They also received a 1,000-euro cash bonus.
“We continue to work directly with Tesla Grohmann employees and are prepared in the event there is an action initiated by the union,” Tesla said in a statement earlier in the week.
The plant has been working on two production lines for the Model 3’s inverter, according to Electrek. The lines, which sources say are scheduled to ship in the next few weeks, are crucial to volume production of the Model 3.
(UAW gearing up for organizing battle with Tesla. Find out more, Click Here.)
Now that he’s met with the workers, who he told that IG Metall doesn’t not share a vision with Tesla, it appears the move for a strike has been averted. The EV maker does not anticipate any impact on the timeline for production of the Model 3.
The Grohmann subsidiary is charged with “building the machines that build the machines,” Musk said at the time of the acquisition. Speed and quality are two areas were Tesla struggles and Grohmann specializes in designing and building the equipment needed for high-speed and high-quality manufacturing.
While Tesla officials noted the company had increased its production rate at its Fremont, California-based plant by 400% between 2012 and 2016, it still needs help moving from 40,000 cars annually to the 500,000 it claims it will build by the end of 2018.
(Tesla misses mark on deliveries. Click Here for details.)
The Model 3 is Tesla’s high-volume vehicle, expected to lift the Palo Alto, California-based EV maker from niche player to major automaker. The company’s stock has risen high enough in recent weeks to make it more valuable that General Motors and Ford.